Communications and Technology Industry Research

A recent report from Informa Telecoms & Media (News - Alert) indicates that, during the 2007-2008 period  there has been a steep growth in the prepaid mobile services market.

 

At the end of last year, there were nearly 2.33 billion prepaid subscriptions worldwide, of which two percent of subscriptions accounted for prepaid WCDMA accesses.

 

According to Informa Telecoms & Media, by 2013 there will be approximately 3.93 billion prepaid subscriptions, generating revenues of $382.2 billion. The report shows predictions that from 2007-2013 the prepaid subscription growth might slow down to a global compound annual growth rate (CAGR) of just over nine percent, but the prepaid market will still account for over eighty percent of new mobile subscriptions.

 

In 2007, the prepaid services generated total revenue of nearly $241.9 billion for mobile network operators. Asia Pacific regions topped the prepaid market with forty three percent of global subscriptions and nearly thirty percent of prepaid market revenues, says report.

 

The report also focuses on subscriber identity module (SIM) card users. By end of 2008, it is expected that nearly 28.9 percent of reported global subscriptions will be accounted for secondary or tertiary SIM card ownership. With the increase in the number of individuals owning multiple SIMs, operators might be forced to consider whether issuing SIM cards is a sustainable way of increasing the lifetime value and profitability of individual customers.

 

It is expected that the future growth of the prepaid mobile services market will be primarily from new customers with very-low-income, in developing markets. Even existing prepaid customers who are intending to spend on value-added services also contribute for the growth. Contract customers using mobile broadband applications and those who are receptive to hybrid tariff plans can as well increase the growth of prepaid mobile services market.

 

According to the report, prepaid customers in developing regions are often able to access more advanced services than in developed markets. Operators will have to do a balancing act by increasing the prepaid base of low-spending customers and as well focus on developing existing prepaid customers in the long-term. Even the role of new services, which have the capability to increase the potential of the mobile handset, will also contribute to the growth.

 

Emerging markets with new prepaid mobile applications is a potential path available for operators to diversify their revenue streams. Diversification of revenue into related mobile-based applications and increased use of their mobile customer base and billing/recharge relationship, operators can look forward to improve their return on investment (RoI), increase usage of their networks.